SIGNIFICANT INFLECTION POINT MAY BE AT HAND
Jeffrey Spotts, CMT
In our view, several markets, sectors, leadership groups and commodities are at an important turning point. Although we have been a bit early in this analysis, there are many opportunities for positioning in excellent risk/reward setups. Our view is that at least a weekly 4th wave pullback is in the making, allowing for a good long entry later this year. However, this condition may not present itself for several weeks, even months.
European markets have daily and weekly sell signals, perfectly set into TD PROP MOMENTUM levels:
Many leadership stocks in major markets have sell signals, adding to the quality of the market calls.
Financial stocks seem to be making a parallel with the history of the Technology sector. Technology went through its bubble in 2000, after which the sector had a decent rally, and subsequent, long-term sell off, until bottoming this past low. Financials look to be finished with its rally, and is not poised to make further lows. Our focus is on the credit card sector, where politics, limits and regulation are coming.
Commodity-related equities have undoubtably been the leadership in global equities over the past year. This group is highly correlllated to emerging markets. There seems to be room for significant pullbacks in these areas.
As stated, our view is that many markets are poised for a significant pullback, with at least a several week duration. Sentiment surely supports this with recent AAII and other investor polls.